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(CNN) -- Hezbollah leader Sheik Hassan Nasrallah apologized for an attack that killed two Israeli Arab children in northern Israel, saying the youngsters were "martyrs for Palestine."

In a Thursday interview with Arabic-language news network Al-Jazeera, Nasrallah accepted responsibility for the Wednesday attack, while conceding that an apology to the family was not sufficient.

"To the family that was hit in Nazareth -- on my behalf and my brothers', I apologize to this family," he said.

"Some events like that happen. At any event, those who were killed in Nazareth, we consider them martyrs for Palestine and martyrs for the nation. I pay my condolences to them."

As volleys of Hezbollah rockets have soared across the border for the last nine days, Israel has pounded Lebanon with artillery and airstrikes. Despite Israeli claims to the contrary, Nasrallah said the attacks have failed to faze Hezbollah politically or militarily.

The Israeli military said Wednesday that it dropped 23 tons of bombs on a bunker housing Hezbollah senior leadership. On Thursday, the military said it estimated that its days of attacks had destroyed about half of Hezbollah's military assets.

Both claims are false, Nasrallah said.

"They are unable, up until this moment, to do anything to harm us, and I assure you of that," he said. "Hezbollah has stood fast and absorbed the strike and now is going to initiate and will deliver surprises that it promises. We keep other things for ourselves that we'll do later on."

He did say, however, that Hezbollah leaders' homes have been destroyed and their families displaced. On the other hand, several Israeli spies have been seized, he said.

Technical and intelligence failures have caused the Israeli military to strike the wrong targets, he said.

"We don't hide our martyrs. Throughout history, we have not done so," he said. "You know Lebanon. There are no secrets in Lebanon."

After Israel announced that it had struck the bunker, Hezbollah said on its Al-Manar television station that Israel had hit an under-construction mosque, but caused no casualties.

Hezbollah, which is considered a terrorist organization by the United States and Israel but is lauded by many Lebanese for its social endeavors, became the target of Israeli assaults after the group's guerillas kidnapped two Israeli soldiers and killed three others during a cross-border raid July 12.

Though Israel has struck what it calls strategic points throughout Lebanon -- including airports, docks, roads, bridges and Hezbollah political offices -- Nasrallah said Thursday that his group is still operating calmly and methodically. (Watch Israeli pilots describe strikes -- 1:54)

Though some Israeli troops have crossed into Lebanon, Nasrallah said that a ground war had yet to begin.

"Fighters on the ground, up to now, they have not even begun," he said. "Our fighters who are present at the border, they have not made a great effort in the past few days."

Call for negotiation

Only "indirect negotiation" will bring about the return of the two kidnapped soldiers, Nasrallah said.

"Even if the whole world comes down, they will not be able to return the two Israeli soldiers unless we have an indirect negotiation," he said.

After the soldiers' abduction, Hezbollah demanded Israel open negotiations on a prisoner exchange. Israel rejected the demand, saying it would encourage more kidnappings.

Hezbollah enjoys backing from Syria and Lebanon, but Nasrallah denied during the interview that either country played a role in the current conflict.

"Hezbollah is not fighting for Syria. Hezbollah is not fighting for Iran. Hezbollah is fighting for Lebanon," he said.

"Hezbollah has always put the Lebanese interests first," he said. "We are a resistance on Lebanese land. We have prisoners in Israeli jails. We have the right to have them back."

Nasrallah said several times that Israel is a formidable opponent, especially considering that it possesses "the most powerful air force in the Middle East and one of the most powerful in the world, and they own the skies."

He further said it was "logical" that Lebanon has incurred more casualties than Israel because Israel has better military technology and, unlike Lebanon, its civilians have bomb shelters.

Israel's response to Hezbollah rocket attacks has been excessive because its goal is not to free the soldiers but "to eradicate Hezbollah and every other resistance in Lebanon," he added.

Israel, he said, would have found a pretext to launch the current offensive even if the soldiers had not been kidnapped.

"Israel was told by America to go ahead and finish this issue," he alleged. "This is what Israel is doing. This is what America needs to recreate the region anew."

As for a lack of support from some Arab nations, Nasrallah said he wasn't surprised because the international community has never supported Hezbollah. In their hearts, though, Arabs support the movement, he said.

Nasrallah concurred with Amr Moussa, the secretary-general of the Arab League, who said Saturday that the Middle East process was "dead." (Full story)